Constructive Dismissal concept
Constructive dismissal is an employer’s act amounting to dismissal but made to appear as if it were not – a dismissal in disguise. In most cases of constructive dismissal, the employee is allowed to continue to work, but is simply reassigned, or demoted, or his pay diminished without a valid reason to do so.
Constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefit and privileges. There may be constructive dismissal if an act of clear discrimination, insensibility or disdain by an employer becomes so unbearable on the part or the employee that it could foreclose any choice by him except to forego his continued employment. (See Hyatt Taxi Services case, G.R. No. 143204, June 26, 2001.)
Constructive Dismissal and Involuntary Resignation
Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee.
In Globe Telecom, Inc. v. Florendo-Flores, it was held that where an employee ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an adverse working environment rendering it impossible for such employee to continue working for her employer. Hence, her severance from the company was not of her own making and therefore amounted to an illegal termination of employment. (Cited in Francisco vs. NLRC, G.R. No. 170087, August 21, 2006.)
- Diminution of pay. A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. (Francisco vs. NLRC)
- Transfer of employee not amounting to constructive dismissal. Transfer of an employee from one area of operation to another is a management prerogative and is not constitutive of constructive dismissal, when the transfer is based on sound business judgment, unattended by a demotion in rank or a diminution of pay or bad faith. (Tan vs. NLRC, G.R. No. 128290, November 24, 1998.)
- Transfer of employee amounting to constructive dismissal. A transfer amounts to constructive dismissal when the transfer is unreasonable, unlikely, inconvenient, impossible, or prejudicial to the employee. (Phil. Industrial Security Agency Corp. vs. Aguinaldo, G.R. No. 149974, June 15, 2005.)
Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.